The Bank of N.Y. Mellon Tr. Co. v. Munn

2022 NY Slip Op 31283(U)

THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION FKA THE BANK OF NEW YORK TRUST COMPANY, N.A., AS SUCCESSOR TO . JPMORGAN CHASE BANK, N.A., AS TRUSTEE FOR RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC., MORTGAGE ASSET-BACKED PASS-THROUGH, Plaintiff, v. KATHLEEN MUNN, AS EXECUTRIX AND HEIR AND DISTRIBUTEE OF THE ESTATE OF EDWARD F. FORDHAM; EDWARD FORDHAM JR., AS HEIR AND DISTRIBUTEE OF THE ESTATE OF EDWARD F. FORDHAM; DARYL FORDHAM, AS HEIR AND DISTRIBUTEE OF THE ESTATE OF EDWARD F. FORDHAM; STANLEY GRAYSON, AS EXECUTOR OF THE ESTATE OF EDWARD F. FORDHAM; THE UNKNOWN HEIRS AND DISTRIBUTEES OF THE ESTATE OF EDWARD F. FORDMAN; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; UNITED STATES OF AMERICA -INTERNAL REVENUE SERVICE; NEW YORK CITY PARKING VIOLATIONS BUREAU; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; NEW YORK SUPREME COURT; CRIMINAL COURT OF THE CITY OF NEW YORK; NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT; SEVEN STAR FUEL CORP. JOHN DOE # 1" thorough "JOHN DOE #12," the last Twelve names being fictitious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in, or lien upon the Subject Property, described in the complaint; Defendant.

INDEX No. 850217/2016

Supreme Court, New York County

April 12, 2022

Unpublished Opinion

DECISION + ORDER ON MOTION

FRANCIS A. KAHN, III, J.S.C.

The following e-filed documents, listed by NYSCEF document number (Motion 003) 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116 117, 118, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130 131, 139, 141, 142, 143, 146, 147, 148, 149, 150, 151, 152, 153, 162, 163, 164, 165, 166, 167, 168, 169, 170 were read on this motion to/for JUDGMENT - SUMMARY.

Upon the foregoing documents, the motion and cross-motion are determined as follows:

Plaintiff, The Bank Of New York Mellon Trust Company, National Association fka The Bank Of New York Trust Company, N.A., as Successor to JPMorgan Chase Bank, N.A., as Premises: Trustee for Residential Asset Mortgage 33 West 126th Street Products, Inc., Mortgage Asset-Backed Pass- New York, Ny 10027 through Certificates, Series 2006-RS1 ("BONY"), commenced this action to foreclose on a mortgage encumbering real property located at 33 West 126"' Street, New York, New York. The mortgage secures a loan given by non-party, First National Bank of Arizona, to Edward F. Fordham, who died before this action was commenced, and evidenced by a note of the same date as the mortgage.

Upon Decedent/Mortgagor's death, it appears Defendants Kathleen Munn ("Munn") and Stanley Grayson ("Grayson") were appointed co-fiduciaries of Decedent's estate, but no decree or certificate of letters has been proffered by any party. Defendant Stanley Grayson, via counsel, served an answer, dated February 28, 2017, solely in his capacity as "Executor of the Estate of Edward F. Fordham" but pleaded no affirmative defenses. Defendant Munn apparently served a pro se answer, dated February 17, 2017, individually and as executrix and beneficiary of the Estate of Edward F. Fordham and plead simply "General Denial". All the other Defendants either filed notices of appearance or defaulted.

Now, Plaintiff moves for inter alia summary judgment against Munn and Grayson, for a default judgment against the non-appearing parties, appointing a referee to compute and to amend the caption. Defendant Munn opposes Plaintiffs motion and cross-moves pursuant CPLR §§3023[b] and 3212 for leave to amend her answer to assert, inter alia, nine affirmative defenses as well as for summary judgment dismissing Plaintiffs complaint based mainly upon the proposed affirmative defenses.

As the proposed affirmative defenses directly impact what Plaintiff must proffer as a prima facie case for summary judgment (see generally Wells Fargo Bank, N.A. v Tricario, 180 A.D.3d 848 [2nd Dept 2020]; U.S. Bank, NA v Nathan, 173 A.D.3d 1112 [2d Dept 2019]; HSBC Bank USA, N.A. v Bermudez, 175 A.D.3d 667, 669 [2d Dept 2019]), the Court will address that branch of the cross-motion first. Leave to amend a pleading under CPLR §3025[b] is to be freely given "absent prejudice or surprise resulting directly from the delay" (see e.g. O'Halloran v Metropolitan Transp. Autk, 154 A.D.3d 83 [1st Dept 2017]; Anoun v City of New York, 85 A.D.3d 694 [1st Dept 2011]; see also Fahey v County of Ontario, 4-N.Y.2d 934, 935 [1978]). All that need be shown is that "the proffered amendment is not palpably insufficient or clearly devoid of merit" (MBIA Ins. Corp. v Greystone & Co., Inc., 74 A.D.3d 499 [1st Dept 2010]). To justify denial of such a motion, the opposing party "must overcome a heavy presumption of validity in favor of [allowing amendment]" (McGhee v Odell, 96 A.D.3d 449, 450 [1st Dept 2012]).

In the proposed amended answer. Defendant Munn seeks to assert nine affirmative defenses as follows: [1] Failure to state a cause of action, [2] expiration of the statute of limitations, [3] violation of the statute of frauds, [4] lack of standing, [5] violation of Banking Law 6-1, [6] failure to comply with RPAPL §1304, [7] failure to serve pre-foreclosure notices required by contract, [8] improper assignment of the note and mortgage and [9] commencement of an action against a deceased party.

The first proposed affirmative defense is unnecessary since dismissal cannot be effectuated without a motion pursuant to CPLR 3211 [a][7] (see e.g. Riland v Frederick S. Todman & Co., 56 A.D.2d 350 [1st Dept 1977]). Although, a motion to dismiss this type of defense does not lie as it harmless "surplusage" (see San-Dar Assoc. v Fried, 151 A.D.3d 545 [1st Dept 2017]), here as a proposed affirmative defense, its description as surplusage renders it entirely without merit.

The second proposed affirmative defense of expiration of the statute of limitations claims all or part of Plaintiff s claim is time barred. An action to foreclose on a mortgage is governed by a six-year statute of limitations (CPLR §214[6]; Citimortgage, Inc. v Dalal, 187 A.D.3d 567 [2d Dept 2020]). "With respect to a mortgage payable in installments, separate causes of action accrue for each installment that is not paid, and the statute of limitations begins to run on the date each installment becomes due" (U.S. Bank Trust, N.A. v Aorta, 167 A.D.3d 807, 808 [2d Dept 2018]). On the other hand, "even if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt" (EMC Mtge. Corp. v Patella, 279 A.D.2d 604, 605 [2d Dept 2001]).

Here, Plaintiff alleges in the complaint that the Decedent defaulted in repayment beginning with the installment payment due January 1, 2010, which continued through November 4, 2016. The within action was commenced November 10, 2016, which is more than six-years after the first installment payment default. Nevertheless, Decedent's alleged default in 2010 does not ipso facto demonstrate the mortgage note was accelerated causing the statute of limitations to accrue on the entire debt. Acceleration occurs through "an unequivocal acceleration notice transmitted to the borrower" as well as commencement of a commencement of a foreclosure action (Freedom Mortgage Corp. v Engel, 37 N.Y.3d 1, 25 [2021]). The earliest acceleration date discernable from the moving papers is the commencement of the action. The default notice proffered by Plaintiff, dated June 14, 2016, is not unequivocal as it states that failure to bring the account current "may result in our election to exercise our right to foreclose" (see JP Morgan Chase Bank, N.A. v Garcete, __A.D.3d__, 2022 NY Slip Op 02119 [2d Dept 2022]). Thus, a claim the entire mortgage debt is extinguished is doubtful on this record. On the other hand, if no acceleration occurred before the action was commenced it is possible that any installment payments due more than six years prior to the commencement of this action is time-barred (see U.S. Bank N.A. v Singer, 192 A.D.3d 1182 [2d Dept 2021]) and this defense is not insufficient on its face.

The third proposed affirmative defense of the statute of frauds is entirely conclusory and Defendant offered no argument to support the sufficiency of same in the motion. As such, this affirmative defenses is nothing more than an unsubstantiated legal conclusion which is insufficiently pled as a matter of law (see Board of Mgrs. of Ruppert Yorkville Towers Condominium v Hayden, 169 A.D.3d 569 [1st Dept 2019]; see also Bosco Credit V Trust Series 2012-1 v. Johnson, 177 A.D.3d 561 [1st Dept 2020]; 170 W. Vil. Assoc. v. G & E Realty, Inc., 56 A.D.3d 372 [1st Dept 2008]; see also Becher v Feller, 64 A.D.3d 672 [2d Dept 2009]; Cohen Fashion Opt., Inc. v V & M Opt., Inc., 51 A.D.3d 619 [2d Dept 2008]).

The fourth and eighth proposed affirmative defenses both relate to Plaintiffs standing to commence this action. Standing in a foreclosure action is established in one of three ways: [1] direct privity between mortgagor and mortgagee, [2] holder status via physical possession of the note prior to commencement of the action which contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff either on its face or by allonge, and [3] assignment of the note to Plaintiff prior to commencement of the action (see e.g. Wells Fargo Bank, N.A. v Tricario, 180 A.D.3d 848 [2d Dept 2020]; Wells Fargo Bank, NA v Ostiguy, 127 A.D.3d 1375 [3d Dept 2015]). As to the latter two circumstances, the note is the dispositive instrument (Aurora Loan Servs., LLC v Taylor, 25 N.Y.3d 355, 361-362 [2015]).

Here there is no dispute that Plaintiff is not the...